Visionary Innovator 2012

Why the World Needs a Corporate Integrity Index?

Spike Choo

Principal Consultant

What is Corporate Integrity Index

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Measures the degree to which a corporation

and its office bearers consistently adhere to a

code of ethics and to established laws

Why do we need another index?

� NUS Governance and Transparency Index

� BT Singapore Corporate Awards

� SOX, Dodd Frank, etc

3

What about Software?

Hardware

Why software matters

� Unethical behaviour has a direct impact on shareholder value

4

Greg Smith, ex-director, Goldman Sachs, Mar 12

Founded: 1869

Corporate performance should not, and cannot be measured by financial metrics alone

Olympus board apologizes for accounting fraud, Nov 2011

Founded: 1919

But how can you measure Integrity?

“Honey, how much do you love me?”

- 2nd most dreaded question faced by

husbands, boyfriends and suitors

Money Time Effort

=

5

Measuring Integrity – what we hope to achieve

6

Ultimately its about tracking behaviourto change attitude and inculcate the right values

Honesty, Fairness, Altruism, etc

ATTITUDE

How do you go about doing it?

Tracking Perceptions

� Review awards, recognition, etc

� Measure “chatter” on social media, news, etc

� Conduct 360 survey with stakeholders

Tracking Intentions

� Measure outputs and results

� Review “planned” vs“reality”

� Benchmark against peers

Tracking Actions

� Review existing governance framework, employment and labourpolicies, supply chain standards, etc

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Case Study

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Measurement Hardware Software Score

Governance & Transparency

Employment & Labor Policies

Environment & Sustainability

Community & Charity Initiatives

• SG Corporate Award for Best Annual Report (Silver)

• FTSE 4Good Index

• Rank 2nd in BT Governance and Transparency Index

• 6.5% of payroll spent on training

• 74 learning hrs/ staff

• 5 courses/ staff/ year

• Sustainable Fleet

• Green Operations

• Green Innovation

• Green Community

• MRT Silver Tribute Fund

• Blood donation drives

• Promotion of the Arts

• Community bonding through tie-ups with CDC, National day initiatives, etc

CAGR (2007-11)

• CEO Pay: 12%

• Avg Staff Pay: -0.2%

• Revenue: 5.5%,

• PATMI: 3.5%

• 37% below 41 yo

• 63% above 41 yo

• Years of Service

• 64% > 5 yrs

• 54% >10 yrs

• ECO Heros Program (Pple)

• MRT: Most efficient metro globally

• Bus: 2nd most efficient Bus Metro globally

• Donated and raise more than $17M cash and kind for 2011

• 10.6% of PATMI

• 29% increase YoY

• $2,590/ staff

7.2/10

= 0 = 4

Conclusion

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You can’t stop bad behavior, but you can certainly keep it in check!

Thank You!